Legal Compliance Guidance

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All information on this website, and all publications, articles, email correspondence, and telephone consultations provided by Council attorneys and legal staff are intended for informational purposes only and not as part of an attorney-client relationship. Council attorneys are not licensed in every state and cannot provide legal representation. The information is not a substitute for expert legal, tax, or other professional advice tailored to your specific circumstances and may not be relied upon for the purpose of avoiding any penalties that may be imposed under the Internal Revenue Code. Council members may email legal@cof.org with inquiries and for more information.

Displaying 81 - 96 of 123 results

Taxable Distributions for Donor Advised Funds

Fundamentals, Legal Compliance Guidance
Public charities that hold donor advised funds must comply with special rules regarding payments from such funds. Provisions under the Pension Protection Act of 2006 require certain payments from donor advised funds to be made using expenditure responsibility, while certain other payments are…

Grants to Organizations from Donor-Advised Funds: Is Expenditure Responsibility Required?

Legal Compliance Guidance
Use this flowchart to determine if grants from donor-advised funds require expenditure responsibility.

Providing Large Grants to Small Grantees

Legal Compliance Guidance
Lawyers rarely tell foundation managers, "Relax, don’t worry so much!" But in the case of "tipping," that’s been our advice for more than 10 years. What is the so-called "tipping problem" and why are so many foundations (still) so worried about it?   Tipping occurs when a private…

What to Require of Grantees

Fundamentals, Legal Compliance Guidance
Good relationships between grantmakers and grantees promote more effective philanthropy. But there's nothing that can mess up a good partnership faster than an overzealous lawyer. In seeking to protect their foundation clients, lawyers can sometimes impose excessive requirements on grantees,…

To Check or Not to Check: Complying With OFAC Regulations

Legal Compliance Guidance
After September 11, 2001, many grantmakers and other charitable organizations that were not previously familiar with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), learned of its existence. As one of the key U.S. government agencies seeking to shut down terrorism funding…

The Debate Over Anti-Terrorism Certification

Legal Compliance Guidance
In an effort to ensure that charitable resources are used exclusively for charitable purposes and not used to support terrorist activity, organizations may choose to adopt practices in addition to those explicitly required by law. Among the practices that some charities choose to adopt is including…

Multi-Year Grants: To Commit or Not to Commit

Legal Compliance Guidance
Can we back out of a multiyear commitment we made in a prior year because our foundation’s assets have declined? The answer in many cases is “no.” That is, unless your grantee is willing to release your foundation from its obligation. Generally, an unconditional, multiyear grant is considered a…

Community Foundations and Grants to Non-Charities

Legal Compliance Guidance
With a little caution, community foundations can support the charitable activities of non-charities. A chamber of commerce requests a grant to start a computer-training program. A gardening club asks for money to cover a local beautification project. A cemetery association seeks support for…

Faith-based Grantmaking: A Basic Guide for the Perplexed

Legal Compliance Guidance
Generally, there is no legal restriction against making grants to churches, synagogues, mosques or other religious institutions. But there are some things foundations interested in such grantmaking should know. For years, private foundations and public charities have recognized religious…

Understanding Fiscal Sponsorship

Legal Compliance Guidance
Everything you need to know to stay out of trouble with third-party representatives. Does hearing the sentence "Just make that grant check payable to my fiscal agent" stop you in your tracks? It should. If your potential grantees are washing your grant funds through an accommodating charity that…

Donor Advised Fund Gift to a 501(c)(3) Donor

Legal Compliance Guidance
Can a 501(c)(3) organization with a donor advised fund at a community foundation make a distribution to itself? Unfortunately, when the law changed under the Pension Protection Act of 2006, this was left unclear. Intermediate sanctions rules prohibit grants and similar payments to donors from a…

Increasing the Number and Size of Awards

Legal Compliance Guidance
When donors to scholarship funds see the impact that their money can have on the life of a student, they are often inspired to contribute more. Sometimes they will add more to the principal of the fund so that future awardees can receive bigger scholarships or more scholarships can be awarded.…

Providing Relief in Times of Disaster - Grants to New Charities

Legal Compliance Guidance
Ideally, grantmakers will work with an existing charity or other well-established organization to provide disaster relief. But in the months after a disaster, it is not uncommon to see new charities cropping up in efforts to meet the immense and diverse needs of the affected communities. The…

Grants to Government

Legal Compliance Guidance
The private foundation executive director was concerned. Members of her board were going to make grants to promote public housing and economic development but none of the groups involved were the typical 501(c)(3)s to which the foundation normally made grants. One possibility seemed to be making a…

Funding Charitable Work in Sanctioned Countries

Legal Compliance Guidance
Since the terrorism attacks on September 11, 2001, grantmakers and other charitable organizations have become quite familiar with the work of the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) in the area of anti-terrorism concerns. OFAC has been one of the key U.S. government…

Grantmaking in an Age of Terrorism: Compliance Strategies

Legal Compliance Guidance
Since the November 7, 2002 publication by the United States Department of the Treasury of its “Anti-Terrorist Financing Guidelines: Voluntary Best Practices for U.S.-based Charities,”1 grantmakers have grappled with the problem of how to comply with their legal obligations under Executive…

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